Log in/Register

Please log in or register to continue. Registration is free and requires only your email address.

Log in

Register

Emailrequired

PasswordrequiredRemember me?

Please enter your email address and click on the reset-password button. You'll receive an email shortly with a link to create a new password. If you have trouble finding this email, please check your spam folder.

To continue reading, please log in or enter your email address.

To access our archive, please log in or register now and read two articles from our archive every month for free. For unlimited access to our archive, as well as to the unrivaled analysis of PS On Point, subscribe now.

Prof J.Stiglitz is one of a group of the most brilliant economists of our era, including also and namely, P.Krugman, Brad DeLong, L.Summers, or Paul de Grauwe. Unfortunately, politicians tend to prioritize short-term objectives against the recommendations of scientists and/or specialists from the most diverse areas of activity. The last paragraph of this article is paradigmatic.Yet, I am not completely aligned with Prof.Stiglitz appreciation on the Fed latest policies concerning interest rates. In fact, it is my belief that several mistakes have been simultaneously occurring in recent years involving both governments and central banks:- by accepting unfair competition from emerging economies which are not obliged to follow the same labor, social or environmental rules that national producers are obliged to. (which is negative for employment, wages, and inflation)- by underestimating that monetary expansion without a proper fiscal expansion is less effective on the goals for increasing employment, wages, inflation, and GDP.- by overfocusing on low inflation in prejudice of the above mentioned, keeping low rates for too long, inducing financial bubbles that sooner or later will burst, with the well known terrible consequences.

Sorry Joe. Obama beat you to it, appointing Janet Yellen to continue keeping Bernanke's lid on interest rates and making it easier for his government to spend trillions on bailouts while crushing small business under new regulations. Effectively postponing any normal recovery until he was out of office.

I hate to burst your bubble, Mr. Stiglitz, but do you think the last 9 years have not given us a politicized Fed already? Mr Trump's choice is solid for all the right reasons and that choice will have to endure Trump's slings and arrows because no one is safe in this administration if you cross him.

Time will tell what kind of mettle Mr Powell is made of, but the situation of politics at the Fed is far from new.

What everyone needs to accept, is the recognition that the underlying weak growth in Western economies, (not just the US economy), has been caused by a failure of competition; competition for the employee. With everyone focused upon the economic needs of "government", it is now time to bring into focus the need for the future employer, the creator of a new business, who in turn, is setting out to employ others in their local community.

What we lack and now desperately need to be put into place is an agreed set of rules, mechanisms and at least one new institution, designed to feed free enterprise equity capital into the hands of the future employer. I have called that process Recapitalisation Of The Grass Roots Economy; RecapGRE.

The FED needs to return to the underlying thinking that set the Oklahoma Land Rush into motion. Instead of using parcels of land, they should use a significant portion of the funds they hold. Such a release of funds, directly into new very small start up business creation, entirely led by availability of an employee; where the rules demand; no new employment, no access to the free enterprise equity capital, will drive renewed competition for the employee, within a framework designed to create new prosperity; right down at the grass roots of the economy.